Bullish view
- Buy the GBP/USD pair and set a take-profit at 1.3000.
- Add a stop-loss at 1.2600.
- Timeline: 1-3 days.
Bearish view
- Sell the GBP/USD pair and set a take-profit at 1.2600.
- Add a stop-loss at 1.3000.
The GBP/USD exchange rate rose slightly as the fear among investors eased following Donald Trump’s decision to pause some of his tariffs on other countries for 90 days. It rose to a high of 1.2860, up by 6% from its lowest point since January 13.
Trade tensions have eased
The GBP/USD pair held steady after Donald Trump announced that he would pause tariffs on cooperating countries for 90 days. His administration will use this time to negotiate with these countries in a bid to lower the significantly high trade deficit.
The UK is one of those countries that will benefit from this tariff relief, meaning that its economy will continue its recovery path. Initially, all goods from the UK were to attract a 10% tariff.
The US and the UK are close trading partners with the US accounting for 17.2% of its trading volue. They have an annual trading volume of over £294 billion. As such, tariffs would have had a significant impact on the UK economy.
The next key catalyst for the GBP/USD pair will be the upcoming US inflation data. According to Investing, analysts expect the data to show that the country’s inflation moved downwards in March.
The headline CPI figure is expected to come in at 2.6%, down from 2.8% in the previous month. Core inflation, which excludes the volatile food and energy products, is expected to fall from 3.1% in February to 3.0% in March.
Without the reciprocal tariffs, there is a likelihood that inflation will continue falling, meaning that the Fed may decide to deliver more cuts this year.
The GBP/USD pair will also react to the upcoming statements by top Fed officials like Patrick Harker, Austan Goolsbee, and Michele Bowman.
GBP/USD technical analysis
The daily chart shows that the GBP/USD pair has been in a strong uptrend in the past few days. It has moved from the year-to-date low of 1.2105 to 1.2800.
The pair has moved above the 50-day moving average, and is slightly above the lower side of the ascending channel. Also, it moved above the major S/R pivot point of the Murrey Math Lines tool.
Therefore, the pair will likely keep rising as bulls target the key resistance point at 1.3000, which is slightly above the strong pivot reverse point of the Murrey Math Lines tool. A move below the support at 1.2600 will invalidate the bullish view.
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